Virtual server/pc questions

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Ok. I have virtual PC, and Virtual server installed on a machine. The machine is a Pentium 4 1.7Ghz, 1.2G RAM, and 80GB hdd. Now, it seems to take an incredibly long time to install windows xp on a virtual machine, etc, yet CPU usage hovers around 10-15% and then back to 0%. Would a really beefy machine like a dual core make any difference here, or is it just the nature of VM environments? Bassically im looking to setup three Server 2003 environments like exchange, AD, etc, and also a couple of XP machines. Anyone have any idea what sort of spec equipment I would need to have smooth performance here? Cheers.